Group of Seven wealthy nations backs steps to deter tax dodging by multinational firms

Category: Business

Listening

Unlocking Word Meanings

Read the following words/expressions found in today’s article.

  1. stash / stæʃ / (v.) – to put something in a safe or secret place
    Example:

    She stashed the chocolate in a plastic box under her bed so her younger brother wouldn’t find them.


  2. grapple / ˈgræp əl / (v.) – to try to deal with or solve a problem
    Example:

    Many countries are grappling with how to reduce the effects of climate change.


  3. crucially / ˈkru ʃəli / (adv.) – with strong or clear importance
    Example:

    More crucially, how can we make sure it’s fair for everyone?


  4. haven / ˈheɪ vən / (n.) – a safe place
    Example:

    This place is a haven for street cats and dogs. The locals feed and take care of them.


  5. entice / ɛnˈtaɪs / (v.) – to attract or convince a person to do something
    Example:

    The new ad enticed many people to buy the product.


Article

Read the text below.

The Group of Seven wealthy democracies agreed June 5 to support a global minimum corporate tax of at least 15% to deter multinational companies from avoiding taxes by stashing profits in low-rate countries.


G7 finance ministers meeting in London also endorsed proposals to make the world’s biggest companies — including U.S.-based tech giants — pay taxes in countries where they sell in large amounts but have no physical headquarters.


British Treasury chief Rishi Sunak said the deal would “reform the global tax system to make it fit for the global digital age and crucially to make sure that it’s fair, so that the right companies pay the right tax in the right places.”


Nations have been grappling for years with the question of how to deter companies from legally avoiding paying taxes by using accounting and legal schemes to assign their profits to subsidiaries in tax havens — typically small countries that entice companies with low or zero taxes, even though the firms do little actual business there.  (AP)


This article was provided by The Japan Times Alpha.


Viewpoint Discussion

Enjoy a discussion with your tutor.

Discussion A

  • G7 finance ministers meeting in London also endorsed proposals to make the world’s biggest companies — including U.S.-based tech giants — pay taxes in countries where they sell in large amounts but have no physical headquarters. Do you agree with the proposal? Why or why not? Discuss.
  • Do you worry that increasing taxes on these companies will cause them to raise their prices? Why or why not? Discuss.

Discussion B

  • Do you know the corporate tax rate in your country? How about the income tax rate or sales tax rate? Do you think these rates are too high, too low, or just right? Why? Discuss.
  • Many multinational companies use legal ways to avoid paying taxes. If you could find a legal way to stop paying taxes, would you do so, or do you feel that paying taxes is your responsibility as a citizen? Why? Discuss.